After many years of campaigning by Age UK and our predecessor organisations, the Government announced in July that it would be phasing out the Default Retirement Age (DRA) in 2011. This is great news for people approaching State Pension Age, as the choice of when they retire is effectively being handed back to them, with their employer no longer able to tell them to leave simply because of their age.
The Coalition Government made it clear that they would end this unfair practice, with a commitment to ‘phase out the DRA’ appearing in the Coalition Agreement. This was good news indeed, but nonetheless as the DRA is abolished there will undoubtedly be other issues that arise. The Government ran a consultation over the summer on how to achieve this aim, which raised some issues that will need to be faced by both businesses and employees. They did, however, offer a fairly firm timescale, with an end to retirement notices being issued after April 2011, and therefore no forced retirement at all from October.
Our response was centred on meeting the needs of older workers, which is imperative if reforms are to be effective, and ensuring that any changes are fair and workable to both parties.
The most pertinent issue thrown up is the idea of employers getting together with their employees to discuss future working and retirement plans. This has the potential to be a positive development, providing an opportunity for older workers (and for that matter workers of all ages) to speak to their employer about their aspirations for the future, in terms of working arrangements and retirement plans, and how these can be made a reality.
This wouldn’t have to be only on winding down, but could be on training needs, promotion aspirations or passing on skills to younger colleagues. At present, many workers feel unable to voice such issues.
Employers too are likely to welcome this. Many believe they are at risk of being accused of acting in a discriminatory manner if they raise these issues, so having opportunity to do so, backed by good practice guidance and reassurance that it is not in itself discriminatory, could help them to improve the management of their older employees. It’s important that both parties approach the discussion with a positive mindset without the need to be suspicious of the other’s motives.
However, an atmosphere of trust is essential, and that is why we are concerned that the discussion could evolve into an opportunity for employers to act in a discriminatory manner, and for some to use this continue to try and force out their older workers. The Government must guard against this by making it clear that employees do not have to take up the offer of a meeting, and that the normal discrimination legislation still applies. The discussion needs to be centred on the needs of the individual or it could well fall flat on its face.
Furthermore, everyone has different aspirations for their working lives, and so employees may want this discussion whenever is appropriate for their personal needs. This is why it should not be pinned to any particular age, instead taking place on a flexible basis. It is also an excellent opportunity for the Government to move a step closer to its plans to extend the right to request flexible working to all employees, which is another proposition in the Coalition agreement. Failing to consider flexible working now will make it even harder to implement such a right later on.
In the wider context of the UK’s ageing workforce, the DRA abolition can only be seen in a positive light. Passing control of when to retire back to individuals is essential if the UK economy is going to retain the skills, expertise and commitment of older workers who want to remain economically active, and also to help workers build more satisfactory retirement income. Employers too will benefit from having a greater pool of talent available, but before this can be fully realised many must see past the stereotypes of older workers and recognise the value this group can add to their business. Too many at present do not.